Case study on the new supply chain management model of Shaoguan Iron and Steel Group

Abstract Guangdong Shaoguan Iron and Steel Group Co., Ltd. (Shaoguan Iron and Steel Company for short) is a large state-owned enterprise integrating steel manufacturing, logistics, industry and trade. This case describes how Shaoguan Iron and Steel Company establishes a new supply chain through efficient management and implementing a new logistics model; the specific content of the new model is introduced characteristics of Logistics Management under the Background of New Supply Chain
Key Words Supply Chain； Strategic Alliance； Quick reaction
1. Introduction
On the morning of March 10, 2010, General Manager Lu of Shaoguan Iron and Steel Company began to read last month's sales report. The report reflects the new way customers order; low intensity and high frequency; high quality requirements; diversified demands. With the increasing competition of domestic and foreign iron and steel enterprises, the sales department is under great pressure to the changes in requirements from customer and market. General Manager Lu realized that the competition of domestic iron and steel enterprises is mainly supply chain competition. Shaoguan Iron and Steel Company must establish a new supply chain and unite upstream and downstream enterprises.
2. Case-related background
2.1 Company background
Located in Shaoguan City, the junction of four provinces, Shaoguan Iron and Steel Company has experienced more than 40 years of development and rapid growth. It is one of the top 100 iron and steel enterprises in the world and its products have good reputation and vast customer base. In the process of continuous development, a company system with Shaoguan Iron and Steel Group Co., Ltd. as the core and five subsidiaries as the pillar has been formed.
2.2 Industry background
Iron and steel industry belongs to resource-intensive and capital-intensive industries and is at the center of the industrial chain. Its development is closely related to the speed of national infrastructure and industrial development. Nowadays, the production and demand of iron and steel industry exceed expectations, imports decline, raw fuel procurement costs rise, and profits are low. And Iron and Steel Enterprises in China in the Price of Iron Ore are controlled. As the state intensifies efforts to eliminate backward production enterprises, the reorganization of the industry proceeds in an orderly manner.
3.Case description
3.1 Optimize physical distribution of purchase
In April of 2010, boss Lu got worried because the ironstone seemed to be going to rise in price to continue the next year as pundits said. The purchase of ironstone, which was an essential part of steel production, was still a big problem for SISG. Local mineral resources should have been an advantage of SISG. But the local mineral resources did badly in quality and was too small in size. The other factories in Guangdong were thirst for the mineral resources as well.
After discussion with director Liu, they made a new project of how to choose and evaluate supplier, and even tried to build a similar relationship with other iron and steel enterprise. Finally, they decided to establish a steady resource with the help of cooperation.
3.2 Develop a new information system of physical distribution in the monthly report meeting of July, boss Lu found that there were problems in the information transfer among departments. There were times when Marketing Department found that there were a lack of transport vehicle and Production Department also complained information could often be hysteretic. In fact, this problem was the result of the old and immutable information system. So the ultimate
way to solve this problem was to develop a new information system. After the analysis and compare by Information Department, De lphi7.0+0racle9i system was finally adopted.
3.3 Optimize physical distribution of marketing
A weekend in August,2010, boss Lu went to some shipyards with relative people to learn the circumstances of terminal client. And the result showed that they did well in quality and price but there were problems in the kinds of products and the speed of dispatching.
To solve the problems of dispatching speed, Lu had a discussion with the relative ones. And they thought there could be two parts to work on. On the one hand, they could build machining centers near the big ones of the shipyards. On the other hand, they would like to speed up the construction of Electronic Commerce. By using the method, they could better serve the big customers and expand the customer group at the same time.
4. Summary
After struggle, in 2010, Shaoguan Iron and Steel Company formulated and implemented a new model, and cooperated with cooperative enterprises to build a new supply chain. Under the concept of focusing on customers, strategic alliances was established to share resources, develop new logistics information systems and establish shear processing centers in order to quickly respond to customer needs.
Although great achievements have been made, General Manager Lu believes that there is still room for improvement. He needs to invest a lot of money to continue to improve. Whether he can accomplish a great task with little effort by clever maneuvers or not is still uncertain, but he has made firm determination to continue.

Question: Has the new mode help the company to increase their competitiveness?

Answer rating: 100% (QA)

Answer Yes the New mode helped the company to increase their competitiveness The iron and steel industry is a resource and capitalintensive industry t... View the full answer